STOCKS NEWS US-Player likely takes profits on Zions put plays

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U.S. stock market report 1619 ET 02Mar2010 Player takes profits in Zions put plays

A bullish options player appeared to have celebrated the gains in Zions Bancorp's shares by taking some chips off the table on previously established short put positions. Zions shares rose 1.86 percent to $18.64 after notching a high of $19.18. Interactive Brokers Group equity options analyst Caitlin Duffy said the trader originally sold 10,000 puts at the April $13 strike for a premium of 40 cents apiece on Feb. 4, when shares of the underlying stock were trading at $17.50. One week later, on Feb. 11, with shares trading at $18.16, it appeared the same individual shed another 12,500 puts at the same strike for a premium of 35 cents. Today, the trader bought back all 22,500 put options for 15 cents per contract, she said. Net profits amounted to $500,000 because the investor banked net gains of 25 cents per contract on the 10,000-lot position, and pocketed a net 20 cents per contract on the 12,500-lot position, Duffy wrote in a note to clients.

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1503 02Mar2010
Dendreon shares up after FDA says no public hearing for vaccine

Dendreon Corp was trading about 4 percent higher heading into the final hour of trading after the U.S. Food and Drug Administration said it is not planning to seek advice from outside advisers over the company's experimental prostate cancer vaccine. Earlier, the company's shares dipped in speculation that the vaccine, called Provenge, might have to face public scrutiny at an FDA advisory panel. But the stock recovered later to trade up as much as 8.5 percent to $35.27, its new high.

In the options market, overall trade volume was six times greater than the recent average daily turnover with about 78,000 puts and 50,000 calls traded by late afternoon, according to Trade Alert. WhatsTrading.com option strategist Frederic Ruffy said the March $27 and $30 puts were among the most active contracts. Provenge could be a blockbuster for the biotech company, which has said it would ramp up production to handle an expected $1.2 billion to $2.5 billion of annual sales by late 2011. For details, see

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1443 02Mar2010
Snow may have slowed Feb. U.S. retail sales

Record snow along the U.S. East Coast and other regions likely muted retail sales in February, limiting increases in what was expected to be an easy month for retailers to show big gains over last year.

Retailers that were likely hit the hardest by the storms, based on location of their stores, include BJ's Wholesale Club, Kohl's Corp, Target Corp and to some extent Macy's Inc, according to Planalytics Inc, which provides weather information for businesses.

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1435 ET 02Mar2010 J.C.Penney option bulls shop for gains

Option traders have turned optimistic on department store operator J.C. Penney Co Inc by initiating a variety of strategies to gain upside exposure heading into this week's February retail sales data. Its shares rose 2.9 percent to $28.73. 'The bulls are targeting J.C. Penney today, which is trying to push higher after gapping higher last month,' said optionMonster analyst David Russell in comments on the Web site. The biggest trade detected on the name was a bullish three-way combination consisting of the sale of the April $26 puts, the purchase of the April $28 calls and the sale of April $30 calls. The combination cost a net debit of 40 cents and will earn 400 percent if J.C. Penney closes at or above $30 on expiration, Russell said. Meanwhile, March JCP calls at the $25, $27, $28, and $30 lines are seeing interest as well, said WhatsTrading.com options strategist Frederic Ruffy. He noted the top trade is 1,500 March $30 calls at the asking price of 20 cents per contract.

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1333 ET 02Mar2010 Player bets on near
term range in Trina Solar

Solar power company Trina Solar Ltd midday options action 'suggests investors aren't betting on any big moves in the stock throughout the next three weeks,' said Jud Pyle, chief investment strategist at www.ONN.tv. Trina shares rose 1.6 percent to $22.91. The company is not expected to announce its next earnings figures until mid-May. Pyle noticed an investor sold 7,000 March $20.5-$24.5 strangles for 90 cents. The out-of-the-money March $20.5 puts, currently down 17 cents, traded for 35 cents per contract, while the investor sold the OTM March $24.5 calls, currently down three cents on the day, for roughly 55 cents per contract. With the stock up and the call options actually lower, this action indicates investors sold the strangles, Pyle said. Investors will make money on the strangle sale if Trina shares close between $19.60 to the downside and $25.40 to the upside. Maximum profit on this trade is 90 cents, or the premium collected, while risk is unlimited. Shares climbed above $30 as recently as January, so the bet is that the recent malaise in solar stocks will not reverse all the way before March expiration, Pyle said.

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1209 ET 02Mar2010 Trader reduces risk, takes profits on Kroger puts

Supermarket operator Kroger Co shares rose 13 cents to $22.54. The stock gains allowed one Kroger-bull to take profits on a previously established short put position in the April contract, said Interactive Brokers Group equity options analyst Caitlin Duffy in a note. It appears the investor originally displayed optimism on the stock by selling 11,600 puts at the April $20 strike for 45 cents apiece back on Feb. 1, when shares traded at about $21.50. Today, the trader bought back the 11,600 short puts at a premium of 15 cents, she said.

Thus, the investor walks away from the position with net profits of 30 cents per contract, or total gains of $348,000. Kroger is due to announce earnings on March 9 and that could be the reason for the put purchase, said Jud Pyle, chief investment strategist at www.ONN.tv. If someone bought the options to close, it is less a bearish bet, and more likely someone reducing risk prior to the earnings release. Kroger shares are up more than 10 percent year-to-date compared with the relatively flat S&P 500. 'That outperformance could be why it is time for the investor to take some chips off the table,' Pyle said..

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